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Accounting Policies of Nagpur Power & Industries Ltd. Company

Mar 31, 2023

Significant Accounting Policies

1. Corporate Information

Nagpur Power And Industries Limited (‘NPIL’ or ‘The Company’) is a limited Company incorporated and
domiciled in India. The Company is a public limited company and its equity shares are listed with Bombay Stock
Exchange (“BSE”) in India. The registered office of the Company is situated at 20th Floor, Nirmal Building,
Nariman Point, Mumbai- 400021.

2. Statement of Compliance

These standalone financial statements are prepared and presented in accordance with the Indian Accounting
Standards (Ind AS) notified under the Companies (Indian Accounting Standard) Rules, 2015 as amended by the
Companies (Indian Accounting Standard) Rules, 2017 notified under section 133 of the Companies Act, 2013,
the relevant provisions of the Companies Act, 2013 and the guidelines issued by the Securities and Exchange
Board of India (SEBI), as applicable.

3. Basis of Preparation

The standalone financial statements of the Company have been prepared and presented on the going concern
basis and at historical cost except for the following assets and liabilities which have been measure at fair value.

• Certain financial assets and liabilities at fair value (refer accounting policy regarding financial
instruments)

• Employee’s Defined Benefit Plan as per actuarial valuation

4. Functional and Presentation Currency

The standalone financial statements are presented in Indian Rupees, which is the functional currency of the
Company and the currency of the primary economic environment in which the Company operates.

5. Use of Estimates

The preparation of standalone financial statements in conformity with the Indian Accounting Standards requires
judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities,
disclosures of contingent liabilities on the date of the standalone financial statements and the reported amount
of revenues and expenses during the reporting period. Difference between the actual results and estimates are
recognized in the period in which the results are known/ materialized.

6. Classification of Assets and Liabilities as Current and Non-Current

All assets and liabilities are classified as current and non-current as per the Company’s normal operating cycle,
and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the
time lag between the acquisition of assets for processing and their realization in cash and cash equivalents, 12
months period has been considered by the Company as its normal operating cycle.

7. Overall Consideration

The standalone financial statements have been prepared applying the significant accounting policies and
measurement bases summarized below.

8. Revenue Recognition
Sale of goods

The Company recognizes revenue from sale of goods measured at the fair value of the consideration received
or receivable, upon satisfaction of performance obligation which is at a point in time when control of the goods is
transferred to the customer, generally on delivery of the goods. Depending on the terms of the contract, which
differs from contract to contract, the goods are sold on a reasonable credit term.

Sale of services

Sale of services are recognized on satisfaction of performance obligation towards rendering of such services.

Dividend and interest income

Dividend from investments are recognized in profit or loss when the right to receive payment is established.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to
the Company and the amount of income can be measured reliably.

9. Property Plant and Equipment

Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and
impairment loss. Cost comprises the purchase price and any attributable cost of bringing the assets to its
location and working condition for its intended use, including relevant borrowing costs and any expected costs of
decommissioning.

If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items
(major components) of PPE.

The cost of an item of PPE is recognized as an assets if, and only if, it is probable that the economic benefits
associated with the item will flow the Company in future periods and the item can be measured reliably.
However, cost of excludes indirect taxes to the extent credit of the duty or tax is availed as set off.

Items such as a spare parts, standby equipment and servicing equipment are recognized as PPE when it is held
for use in production or supply of goods or services, or for administrative purpose, and are expected to be used
for more than one year. Otherwise such items are classified as inventory.

An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from
the continued use of assets. Any gain or loss arising on the disposal or retirement of an item of PPE, is
determined as the difference between the sales proceeds and the carrying amount of the assets and is
recognized in the Statement of Profit and Loss.

Capital Advance given towards acquisition or construction of PPE outstanding at each reporting date are
disclosed as Capital Advances under Other Non-current Assets.

Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses
are charged to the Statement of Profit and Loss during the period in which they are incurred.

10. Depreciation and Amortization

Depreciation is recognized on a straight-line basis, based on the useful life of the assets as prescribed under
Schedule II of the Companies Act, 2013, except in respect of certain category of assets, where useful life is
exceeding those prescribed in Schedule II based on the Chartered Engineer’s Valuation Certificate namely:

Assets where useful life differs from Schedule II:

Depreciation on assets purchased / sold during the period is proportionately charged. The residual value for all
the above assets are retained at 5% of the cost. Residual values and useful lives are reviewed and adjusted, if
appropriate, for each reporting period.

11 .Intangible Assets

Intangible assets are stated at cost of acquisition, less accumulated amortization/depletion and accumulated
impairment losses, if any, are amortized over a period of 3 years.

Expenditure incurred on development is capitalized if such expenditure leads to creation of any intangible
assets, otherwise, such expenditure is charged to the Statement of Profit and Loss.

12.Impairment of Assets

At end of each reporting period, the Company reviews the carrying amounts of non-financial assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the assets is estimated to be less than its carrying amount, the carrying amount of
the assets is reduced to its recoverable amount. An impairment loss is recognized in the Statement of Profit and
Loss.

13.Inventories

Inventories of raw materials are stated at lower of cost or net realizable value. Work in process is stated at cost.
Stores, spares & tools are stated at cost except the obsolete/non usable stores, which are written off for
obsolescence. Finished goods and by-products/waste products where cost is ascertainable are stated at lower
of cost or net realisable value and by-products / waste products where cost cannot be determined are stated at
net realisable value. The reusable waste, which is not ascertainable, is not accounted.

14.Cash and Cash equivalents and Cash Flow Statement

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly
liquid investments maturing within three months from the date of acquisition and which are readily convertible
into cash and which are subject to only an insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby Profit or Loss before tax is appropriately classified
for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or
payments. In the cash flow statement, cash and cash equivalents include cash in hand, cheques on hand,
balances with banks in current accounts and other short- term highly liquid investments with original maturities
of three months or less.

15.Segment reporting

The Company is principally engaged in extraction of ‘High / Medium / Low Carbon Ferro Manganese and Silico
Manganese Slag’ which is the only Operating reportable segment as per IND AS 108.

16. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are incurred under finance costs.

17. Foreign Exchange Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the
transaction.

At end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated
at the exchange rates prevailing on that date. Non-monetary items that are measured in terms of historical cost
in a foreign currency, are not retranslated.

Exchange difference on monetary items are recognised in the Statement of Profit and Loss in the period in
which these arise.

18.Income Taxes

Tax expense recognized in the Statement of Profit and Loss comprises the sum of deferred tax and current tax
not recognized in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or
substantively enacted by the end of the reporting period.

Deferred income taxes are calculated using the Balance Sheet approach on temporary differences between the
carrying amounts of assets and liabilities in standalone financial statements and the amount used for taxation
purposes.

Deferred taxes pertaining to items recognized in other comprehensive income (OCI) are disclosed under OCI.

Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible
temporary difference will be utilized against future tax liability. This is assessed based on the Company’s
forecast of future earnings, excluding non-taxable income and expenses and specific limits on the use of any
unused tax loss or credit.

Deferred tax liabilities are generally recognized in full, although Ind AS 12 ‘Income Taxes’ specifies some
exemptions.

Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the
Company for specified period of time, hence, it is presented as Deferred Tax Assets.

As a result of these exemptions the Company does not recognize deferred tax liability on temporary differences
relating to goodwill, or to its investments in subsidiaries.

19. Employee Benefits
Short-term obligations:

Short term obligations are those that are expected to be settled fully within 12 months after the end of the
reporting period. They are recognised up to the end of the reporting period at the amounts expected to be paid
at the time of settlement.

Other Long-term obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after end of the period in
which the employees render the related service.

Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each
financial year. Actuarial gains / losses, if any, are recognised immediately in Statement of Profit and Loss.

Defined Contribution Plans:

Contribution payable to recognised provident funds, which are substantially defined contribution plans, is
recognised as expense in the Statement of Profit and Loss, as they are incurred.

Defined Benefit Plan:

The obligation in respect of defined benefit plan, which covers Gratuity, is provided for on the basis of an
actuarial valuation at the end of each financial year. Gratuity is funded with an approved trust.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet
with a charge or credit recognised in other comprehensive income in the period in which they occur.

Re-measurement recognised in other comprehensive income is reflected immediately in OCI Reserve and will
not be reclassified to Statement of Profit and Loss.

Bonus Payable:

The Company recognised a liability and an expense for bonus. The Company recognised a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.

20. Lease:

The Company, at the inception of a contract, assesses whether the contract is a lease or not lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in

exchange for a consideration. This policy has been applied to contracts existing and entered into on or after
April 1,2019 as per Ind As 116.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of
use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the Company’s incremental borrowing rate. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company
changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease
payments associated with these leases as an expense over the lease term.

In the comparative period, leases under which the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present
value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments and
receipts under operating leases are recognised as an expense and income respectively, on a straight-line basis
in the statement of profit and loss over the lease term except where the lease payments are structured to
increase in line with expected general inflation.

21.Trade receivable

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. If the receivable is expected to be collected within a period of 12 months or less from the reporting
date (or in the normal operating cycle of the business, if longer), they are classified as current assets otherwise
as non-current assets.

Trade receivables are measured at their transaction price unless it contains a significant financing component or
pricing adjustments embedded in the contract.


Mar 31, 2018

Note - 1 Significant Accounting Policies

1. Corporate Information

Nagpur Power And Industries Limited (‘NPIL’ or ‘The Company’) is a limited Company incorporated and domiciled in India.

The Company is a public limited company and its equity shares are listed with Bombay Stock Exchange (“BSE”) in India. The registered office of the Company is situated at 20th Floor, Nirmal Building, Nariman Point, Mumbai- 400021.

2. Statement of Compliance

These financial statements are prepared and presented in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standard) Rules, 2015 as amended by the Companies (Indian Accounting Standard) Rules, 2017 notified under section 133 of the Companies Act, 2013, the relevant provisions of the Companies Act, 2013 and the guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1stApril, 2016. The Company has availed first time adoption exemption as per Ind AS 101 (Refer Note 34for details).

Upto the year ended 31st March 2016, the Company prepared its financial statements in accordance with previous GAAP, which includes Standards notified under the relevant provisions of Companies Act, 2013 as applicable and the guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

In these financial statements for the year ended 31st March, 2018, the financial statements for the previous year 31st March, 2017 and Balance Sheet as at 1st April, 2016 have been prepared and presented as per IND AS for like-to-like comparison.

3. Basis of Preparation

The financial statements of the Company have been prepared and presented on the going concern basis and at historical cost except for the following assets and liabilities which have been measure at fair value.

- Certain financial assets and liabilities at fair value (refer accounting policy regarding financial instruments)

- Employee’s Defined Benefit Plan as per actuarial valuation

4. Functional and Presentation Currency

The financial statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates.

5. Use of Estimates

The preparation of financial statements in conformity with the Indian Accounting Standards requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosures of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

6. Classification of Assets and Liabilities as Current and Non-Current

All assets and liabilities are classified as current and non-current as per the Company’s normal operating cycle, and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time lag between the acquisition of assets for processing and their realization in cash and cash equivalents, 12 months period has been considered by the Company as its normal operating cycle.

7. Overall Consideration

The financial statements have been prepared applying the significant accounting policies and measurement bases summarized below.

8. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

- Sales are recognized on transfer of significant risks and rewards of ownership of the goods to the buyer as per the terms of contract and no uncertainty exists regarding the amount of consideration that will be derived from sales of goods.

It also includes excise duty (as it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not) and price variation based on the contractual agreement.

It measured at fair value of the consideration received net of sales tax/ value added tax and discounts.

- Dividend Income is recognized in the Statement of Profit and Loss only when the right to receive the income is established.

- Interest income is recognized using time proportion method based on the rates implicit in the transaction and the amount outstanding.

9. Property Plant and Equipment

Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and impairment loss. Cost comprises the purchase price and any attributable cost of bringing the assets to its location and working condition for its intended use, including relevant borrowing costs and any expected costs of decommissioning.

If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.

The cost of an item of PPE is recognized as an assets if, and only if, it is probable that the economic benefits associated with the item will flow the Company in future periods and the item can be measured reliably. However, cost of excludes indirect taxes to the extent credit of the duty or tax is availed as set off.

Items such as a spare parts, standby equipment and servicing equipment are recognized as PPE when it is held for use in production or supply of goods or services, or for administrative purpose, and are expected to be used for more than one year. Otherwise such items are classified as inventory.

An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of assets. Any gain or loss arising on the disposal or retirement of an item of PPE, is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognized in the Statement of Profit and Loss.

Capital Advance given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under Other Non-current Assets.

Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred.

10. Depreciation and Amortization

Depreciation is recognized on a straight-line basis, based on the useful life of the assets as prescribed under Schedule II of the Companies Act, 2013, except in respect of certain category of assets, where useful life is exceeding those prescribed in Schedule II based on the Chartered Engineer’s Valuation Certificate namely:

Assets where useful life differs from Schedule II:

Depreciation on assets purchased / sold during the period is proportionately charged. The residual value for all the above assets are retained at 5% of the cost. Residual values and useful lives are reviewed and adjusted, if appropriate, for each reporting period.

11. Intangible Assets

Intangible assets are stated at cost of acquisition, less accumulated amortization/ depletion and accumulated impairment losses, if any, are amortized over a period of 3 years.

Expenditure incurred on development is capitalized if such expenditure leads to creation of any intangible assets, otherwise, such expenditure is charged to the Statement of Profit and Loss.

12. Impairment of Assets

At end of each reporting period, the Company reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated to be less than its carrying amount, the carrying amount of the assets is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit and Loss.

13. Inventories

Inventories of raw materials are stated at lower of cost or net realizable value. Work in process is stated at cost. Stores, spares & tools are stated at cost except the obsolete/non usable stores, which are written off for obsolescence. Finished goods and by-products/waste products where cost is ascertainable are stated at lower of cost or net realisable value and by-products / waste products where cost cannot be determined are stated at net realisable value. The reusable waste, which is not ascertainable, is not accounted.

14. Cash and Cash equivalents and Cash Flow Statement

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within three months from the date of acquisition and which are readily convertible into cash and which are subject to only an insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby Profit or Loss before tax is appropriately classified for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. In the cash flow statement, cash and cash equivalents include cash in hand, cheques on hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities of three months or less.

15. Segment reporting

The Company is principally engaged in extraction of ‘High / Medium / Low Carbon Ferro Manganese and Silico Manganese Slag’ which is the only Operating reportable segment as per IND AS 108.

16. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred under finance costs.

17. Foreign Exchange Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

At end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on that date. Non-monetary items that are measured in terms of historical cost in a foreign currency, are not retranslated.

Exchange difference on monetary items are recognised in the Statement of Profit and Loss in the period in which these arise.

18. Income Taxes

Tax expense recognized in the Statement of Profit and Loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income taxes are calculated using the Balance Sheet approach on temporary differences between the carrying amounts of assets and liabilities in financial statements and the amount used for taxation purposes.

Deferred taxes pertaining to items recognized in other comprehensive income (OCI) are disclosed under OCI.

Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future tax liability. This is assessed based on the Company’s forecast of future earnings, excluding non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.

Deferred tax liabilities are generally recognized in full, although Ind AS 12 ‘Income Taxes’ specifies some exemptions.

Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for specified period of time, hence, it is presented as Deferred Tax Assets.

As a result of these exemptions the Company does not recognize deferred tax liability on temporary differences relating to goodwill, or to its investments in subsidiaries.

19. Employee Benefits Short-term obligations:

Short term obligations are those that are expected to be settled fully within 12 months after the end of the reporting period. They are recognised up to the end of the reporting period at the amounts expected to be paid at the time of settlement.

Other Long-term obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after end of the period in which the employees render the related service.

Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each financial year. Actuarial gains / losses, if any, are recognised immediately in Statement of Profit and Loss.

Defined Contribution Plans:

Contribution payable to recognised provident funds, which are substantially defined contribution plans, is recognised as expense in the Statement of Profit and Loss, as they are incurred.

Defined Benefit Plan:

The obligation in respect of defined benefit plan, which covers Gratuity, is provided for on the basis of an actuarial valuation at the end of each financial year. Gratuity is funded with an approved trust.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in other comprehensive income in the period in which they occur.

Re-measurement recognised in other comprehensive income is reflected immediately in OCI Reserve and will not be reclassified to Statement of Profit and Loss.

Bonus Payable:

The Company recognised a liability and an expense for bonus. The Company recognised a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

20. Lease Finance Lease As a Lessee:

Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred to the Lessee, are classified as finance lease. The assets acquired under finance lease are capitalised at lower of fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased assets. Such assets are amortised over the period of lease or estimated life of such asset, whichever is lower. Lease payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate of return. Lease management fees, lease charges and other initial direct costs are capitalised.

Operating Lease

As a Lessee:

Leases, where significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis over the lease term.

As a Lessor:

Where the Company has substantially retained all the risks and rewards of ownership, are classified as operating leases. Lease income is recognised in the Statement of Profit and Loss on a straight-line basis over lease term.

21. Trade receivable

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. If the receivable is expected to be collected within a period of 12 months or less from the reporting date (or in the normal operating cycle of the business, if longer), they are classified as current assets otherwise as non-current assets.

Trade receivables are measured at their transaction price unless it contains a significant financing component or pricing adjustments embedded in the contract.

22. Provisions and contingent liabilities Provisions:

A Provision is recorded when the Company has a present obligation (legal or constructive)as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

Contingent liabilities:

Whenever there is possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because (a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (b) the amount of the obligation cannot be measured with sufficient reliability are considered as contingent liability.

Show cause notices are not considered as Contingent Liabilities unless converted into demand.

Contingent Assets:

Contingent assets are not recognised in the financial statements since this may result in recognition of income that may never be realized. However, when the realization of income is virtually certain, then the related assets is not a contingent assets and is recognised.

23. Investment in Subsidiaries

The investments in subsidiaries are carried in these financial statements at historical cost except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for as Non-current assets held for sale and discontinued operations.

When the Company is committed to a sale plan involving disposal of an investment, or a portion of an investment, in a subsidiary, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met.

Any retained portion of an investment in a Subsidiary that has not been classified as held for sale continues to be accounted for at historical cost.

24. Financial Instruments

Initial Recognition and Measurement:

Financial assets (other than trade receivables) and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through Statement of Profit and Loss which are measured initially at fair value.

Trade receivables are recognised at their transaction value as the same do not contain significant financing component.

Trade payable is in respect of the amount due on account of goods purchased in the normal course of business. They are recognised at their transaction and services availed value as the same do not contain significant financing component.

Classification and Subsequent Measurement:

Financial Assets:

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL) on the basis of both

(a) Business model for managing the financial assets, and

(b) The contractual cash flow characteristics of the financial asset

(i) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and

(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(i) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and

(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A Financial Asset shall be classified and measured at fair value through profit or loss (FVTPL) unless it is measured at amortised cost or at fair value through OCI (FVTOCI). All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Equity Investments:

Equity investments in Subsidiaries and Associates are out of scope of Ind AS 109 and hence, the Company has accounted for its investment in Subsidiaries at cost. All other equity investments are measured at fair value.

Equity instruments, which are held for trading are classified as at FVTPL. For equity instruments other than held for trading, the company has exercised irrevocable option to recognise in other comprehensive income subsequent changes in the fair value.

Derecognition of financial assets:

The Company derecognize a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises an associated liability.

On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the Statement of profit and loss.

Financial Liabilities and Equity Instruments Classification as Debt or Equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities:

Financial liabilities are classified, at initial recognition:

- at fair value through Profit or Loss,

- Loans and borrowings, Payables, or

- as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings and payables, they are recognised net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent Measurement:

The measurement of financial liabilities depends on their classification, as described below:

Financial Liabilities at FVTPL:

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.

Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of recognition, and only if the criteria in IND AS 109 are satisfied.

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Derecognition of Financial Liabilities:

The Company de-recognises financial liabilities when and only when, the Company’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in the statement of profit and loss.

25. Earnings per share

Basic earnings per share are calculated by dividing the Net Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the Net Profit or Loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are considered for the effects of all dilutive potential equity shares.

ii Disclosure requriement of Ind AS 107- Financial Insturments : Disclosure:

Equity Insturment (Other than Subsidary and Associates) designated at FVTOCI:

These Investment have been designated on intial recoginition to be measured at FVTOCI as these are log-term investment are not intended for sale.

iii Investment in Subsidaires :

The Company opted to measure its investments in Subsidary and Associate at Cost in terms of the exemption available in Ind AS 101 - First Time Adoption of Ind AS. Accordingly, the book value of Investments in Subsidary and Associate as on 1st April, 2016 (The transition date), as per previous GAAP has been now considered as deemed cost.

During the previous year, pursuant to the Right issue, The Motwane Manufacturing Co. Pvt. Ltd. has allot total 92885 nos. of equity shares (face value of Rs. 100/- each) @ Rs. 500/- each including premium of Rs. 400/- per shares. The Company has settled ICD of Rs. 25,058,730/- along with accrued Interest of Rs. 10,262,270/- against share application money.

b The Equity shares of the Company having voting rights and are subject to the restriction as prescribed under the Companies Act, 2013.

c The Company has no holding company. The subsidiary company does not hold any shares in the company.

d Disclosure pursuant to Note no. 6(D) (h,i,j,k,l) of Part I of Schedule III of Companies Act, 2013 is NIL.


Mar 31, 2014

1.1 Basis for preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimate are recognized in the period in which the results are known /materialized.

1.3 Fixed Assets and Depreciation:

Fixed assets are stated at Cost less impairment losses, accumulated depreciation except freehold land, which is stated at cost. Consequent to the recognition of impairment loss depreciation for the year on assets impaired has been provided on the basis of revised balance useful life of those assets and on the straight-line method at the rates and manner prescribed in Schedule XIV to the Companies Act, 1956 on all other assets except office equipments. Depreciation on office equipment is provided at 6.33% on Straight Line Method.

1.4 Investments:

Investments are classified into non current investments and current investments. Non current investments are stated at cost. Current investments are stated at lower of cost or market value. When disposing of a part of the holding of an individual investment, the carrying amount of cost allocated to the part that is disposed is determined on the basis of the average carrying amount of the total holding of the investment.

1.5 Inventories:

Inventories of raw materials are stated at lower of cost or net realizable value. Work in process is stated at cost. Stores, spares & tools are stated at cost except the obsolete/non usable stores, which are written off for obsolescence. Finished goods and by-products/waste products where cost is ascertainable are stated at lower of cost or net realisable value and by-products / waste products where cost cannot be determined are stated at net realisable value. The reusable waste, which is not ascertainable, is not accounted.

1.6 Sundry Debtors and Loans and Advances:

Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful balances.

Notes on Financial Statements for the Year ended 31st March, 2014

1.7 Revenue Recognition:

Revenue is recognised when no significant uncertainty as to determination or realisation exists.

1.8 Retirement and other employee benefits:

i) The Company contributes towards Provident Fund & Family Pension Fund which are defined contribution schemes. Liability in respect thereof is determined on the basis of contribution as required under the statute/ rules.

ii) The Company contributes to defined benefit schemes for Gratuity which is administered through duly constituted and approved independent trust. The liability for Gratuity and leave encashment is determined on the basis of actuarial valuations made at the year end.

1.9 Foreign Exchange Transactions:

Transactions denominated in foreign currency are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the asset. Premium in respect of forward contracts is accounted over the period of the contract.

1.10 Taxation:

Income tax expense comprises of current tax, deferred tax charge or credit and fringe benefit tax. The deferred tax charge or credit is recognised using current tax rates. Where there is an unabsorbed depreciation or carry forward loss, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities.

1.11 Contingent Liability:

Contingent liabilities are usually not provided for unless it is probable that the future out come may be materially detrimental to the Company.


Mar 31, 2012

1.1 Basis for preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statemepts requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimate are recognised in the period in which the results are known/materialized.

1.3 Fixed Assets and Depreciation:

Fixed assets are stated at Cost less impairment losses, accumulated depreciation except freehold land, which is stated at cost. Consequent to the recognition of impairment loss depreciation for the year on assets impaired has been provided on the basis of revised balance useful life of those assets and on the straight-line method. Depreciation is provided on Straight Line Method and at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on all other assets except office equipments, furnaces and pollution control equipment. The depreciation on furnaces and pollution control equipments has been provided on Written Down Value Method and at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 and the office equipments are depreciated at 6.33% on Straight Line Method

1.4 Investments:

Investments are classified into non current investments and current investments. Non current investments are stated at cost. Current investments are stated at lower of cost or market values on overall basis. When disposing of a part of the holding of an individual investment, the carrying amount of cost allocated to the part that is disposed is determined on the basis of the average carrying amount of the total holding of the investment.

1.5 Inventories:

Inventories of raw materials are stated at lower of cost or net realizable value. Work in process is stated at cost. Stores, spares & tools are stated at cost except the obsolete/non usable stores, which are written off for obsolescence. Finished goods and by-products/waste products are stated at lower of cost or net realisable value and by-products / waste products where cost cannot be determined are stated at net realisable value. The reusable waste, which is not ascertainable, is not accounted.

1.6 Sundry Debtors and Loans and Advances:

Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful balances.

1.7 Revenue Recognition:

Revenue is recognised when no significant uncertainty as to determination or realisation exists.

1.8 Retirement and other employee benefit:

i) The Company contributes towards Provident Fund & Family Pension Fund which are defined contribution schemes. Liability in respect thereof is determined on the basis of contribution as required under the statute/ rules.

ii) The Company contributes to defined benefit schemes for Gratuity. Which is administered through duly constituted and approved independent trust. The liability for Gratuity and leave encashment is determined on the basis of actuarial valuations made at the year end.

1.9 Foreign Exchange Transactions:

Transactions denominated in foreign currency are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the asset. Premium in respect of forward contracts is accounted over the period of the contract.

1.10 Taxation:

Income tax expense comprises of current tax, deferred tax charge or credit and fringe benefit tax. The deferred tax charge or credit is recognised using current tax rates. Where there is an unabsorbed depreciation or carry forward loss, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities.

1.11 Contingent Liability:

Contingent liabilities are usually not provided for unless it is probable that the future out come may be materially detrimental to the Company.


Mar 31, 2010

I) Major Accounting Policies:

a) Basis for preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Fixed Assets and Depreciation:

Fixed assets are stated at Cost less impairment losses, accumulated depreciation except freehold land, which is stated at cost. Consequent to the recognition of impairment loss depreciation for the year on assets impaired has been provided on the basis of revised balance useful life of those assets and on the straight-line method. Depreciation is provided on Straight Line Method and at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on all other assets except office equipments, furnaces and pollution control equipment. The depreciation on furnaces and pollution control equipments has been provided on Written Down Value Method and at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 and the office equipments are depreciated at 6.33% on Straight Line Method

c) Investments:

Investments are classified into long term and current investments. Long Term investments are stated at cost. Current investments are stated at lower of cost or market values. When disposing of a part of the holding of an individual investment, the carrying amount of cost allocated to the part that is disposed is determined on the basis of the average carrying amount of the total holding of the investment.

d) Inventories:

Inventories of raw materials are stated at lower of cost or net realizable value. Work in process is stated at cost. Stores, spares & tools are stated at cost except the obsolete/non usable stores, which are written off for obsolescence. Finished goods and by-products/waste products are stated at lower of cost or net realisable value and by-products / waste products where cost cannot be determined are stated at net realisable value. The reusable waste, which is not ascertainable, is not accounted (Refer Note ii).

e) Sundry Debtors and Loans and Advances:

Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful balances.

f) Revenue Recognition:

Revenue is recognised when no significant uncertainty as to determination or realisation exists.

g) Retirement and other employee benefit:

i) The Company contributes towards Provident Fund & Family Pension Fund which are defined contribution schemes. Liability in respect thereof is determined on the basis of contribution as required under the statute/rules. ii) The Company contributes to defined benefit schemes for Gratuity. The liability for Gratuity and leave encashment is determined on the basis of actuarial valuations made at the year end.

h) Foreign Exchange Transactions:

Transactions denominated in foreign currency are accounted at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the asset. Premium in respect of forward contracts is accounted over the period of the contract

I) Taxation:

Income tax expense comprises of current tax, deferred tax charge or credit and fringe benefit tax. The deferred tax charge or credit is recognised using current tax rates. Where there is an unabsorbed depreciation or carry forward loss, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities

j) Contingent Liability:

Contingent liabilities are usually not provided for unless it is probable that the future outcome may be materially detrimental to the Company.

ii) Companys Ferro Alloys unit generated waste during the process of manufacture, which has accumulated over the years in and around the main plant. The waste is reusable for extracting metal content therein. Company has set up a Metal Recovery Plant for the purpose. During the year, company has accounted for stock of unextracted metal contents valuing Rs. 22,400,000 (Previous Year Rs. 5,67,60,000/-) out of this accumulated waste based on the valuation report of the Consultant Metallurgist obtained during the year. The technical consultants have advised the Company that the balance of this accumulated waste in terms of its quality, metal content and realizable value cannot be yet reasonably ascertained. Company has therefore not been in a position to account for stock of this balance accumulated waste.

iii) DEFINED BENEFIT PLANS:

As per Actuarial valuation as on 31st March, 2010 and recognised in the financial statements in respect of Employee Benefit schemes:


Mar 31, 2000

The accounts are prepared in accordance with the accounting principles generally accepted in India and are in line with the relevant laws as well as the guidelines prescribed by the Department of Company Affairs, Ministry of Industry and the institute of Chartered Accountants of India.

(a) System of Accounting :

The Company adopts the accrual basis in the preparation of the accounts.

(b) Sales :

Sales comprise the sale of goods and are inclusive of excise duty and export incentives.

(c) Research and Development :

(i) Research and Development cost which comprise of raw materials, captively consumed Silico Manganese and other chargeable expenditure are charged to revenue when incurred. The credits emanating from this activity is reflected under the head sales and closing stocks.

(ii) Expenditure of capital nature is capitalised under appropriate heads and depreciation provided thereon as per the Companys depreciation policy. Interest and other direct expenses are capitalised upto the date of commissioning of the Plant & Machinery.

(d) Relining Expenses :

Furnace Relining expenses are charged as expenses in the year in which relining is carried out.

(e) Retirement Benefits :

Cost of retirement benefits like Provident Fund, Pension and Gratuity are accounted on accrual basis. Provision for gratuity liability to employees is made on the basis of actuarial valuation.

(f) Privilege leave encashment :

Employees are entitled to accumulate their privilege leave within specified limits and can claim encashment thereof while in service or on separation or otherwise. Provision for leave encashment liability is made on the basis of actuarial valuation.

(g) Depreciation :

Depreciation on the fixed assets is provided on straight line basis at the rates prescribed in Schedule XIV to the Companies Act 1956. On other assets purchased during the period by the company it is provided from the month of acquisition. Leasehold land is amortised over the period of the lease.

(h) Inventories :

Inventories are valued as under :

(i) Finished Products - at lower of cost or net realisable value (Cost includes direct cost and factory overheads in terms of revised Accounting Standard - 2 issued by the Institute of Chartered Accountants of India). It also includes excise duty.

(ii) Raw Materials - at or below cost

(iii) Stores Spares & Tools - at cost

(iv) By-product - at net expected realisable value

(v) Lime Stone (Trading) - at cost

(i) Sundry Debtors :

Debtors are stated after writing off and providing for bad and doubtful debts.

(j) Loans & Advances :

These are also mentioned after providing for doubtful advances.

(k) Foreign Exchange Transactions :

The Purchase and Sales invoices in Foreign Currencies are converted in Indian Rupees at the rates of exchange prevailing on the date of the transactions. The current assets and current liabilities are converted at the exchange rate prevailing on the Balance Sheet date and the exchange gain/loss is recognised in the profit and loss account.

ii) The Company has not debited to its power and fuel account full bills raised by the Maharashtra Sate Electricity Board (MSEB) as the management is of the view that the NTPC power allocation was excessively charged. It was wrongly calculated by MSEB on contracted maximum demand instead of on recorded demand.

The Company has not charged to its profit and loss account Rs. 10,66,51,567/- upto 31-3-2000 (including Rs. 8,32,79,437/- upto past period) but has treated the same as an item of contingent liabilities not provided for (item iii of Schedule 19 - Notes to the Accounts).

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